AMLO’s Last Year Marked by Unmatched Spending Boost

Mexico has again entered the global bond market this year, offering sustainable euro-denominated bonds.

This move follows its largest-ever bond transaction in Latin America, completed just weeks ago.

The country is now selling 2 billion euros (about US$2.2 billion) in sustainable sovereign notes, maturing in eight years.

The sale is managed by Banco Bilbao Vizcaya Argentaria SA, Citigroup Inc., Deutsche Bank AG, HSBC Group, and Natxis SA.

Earlier in the month, Mexico successfully raised US$7.5 billion through a global dollar bond sale, offering various maturity options.

This fiscal strategy marks a departure from President Andrés Manuel López Obrador’s usual approach.

In his final year of presidency, he’s significantly increasing government spending.

This escalation has led to the largest fiscal deficit for Mexico since 1988, driven by expanded welfare programs and the rush to complete key projects before June’s elections.

This increase in expenditure contrasts with his previous stance on fiscal austerity, which had impacted the peso in recent years.

Mexico’s stable position in emerging markets had previously offset these effects.

Mexico’s bond market activity reflects a broader trend among emerging market countries.

These nations are gauging investor interest in new bond offerings after the holiday season.

For example, Chile also issued dollar bonds on January 17, joining Mexico in early-year market ventures.